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Sports

European Union Says Real Madrid Owes Spanish Government 18.4 Million Euros

Real Madrid may owe Spain 18 million euros, and could face even more trouble over their business classification.
Photo credit: Wikipedia

In the United States, cities continuously pay for the homes of professional sports teams. Franchises have become like an audience at an Oprah taping: Everybody gets a publicly-financed stadium. In Spain, though, it's a lot more convoluted.

The European Union handed down a decision this week forcing the Spanish government to recoup 18.4 million euros (plus interest) from Real Madrid, according to an AS.com report, because it found that the government had given Real "illegal state aid" in participating in a land swap deal with the soccer club. The decision stems from a 1998 deal where the city gave the club land in the Las Tablas area of Madrid, but when they realized they couldn't use the land, the club received too much money from the city council as compensation. Now the club has to pay it back. Maybes that's why they are shopping James Rodriguez.

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It's not as if the 18.4 million euros will be a huge loss for the club. They are one of the two richest soccer teams in the world and can afford to put out a team worth hundreds of millions annually, but it's still a weighty sum nipping at their budget. But if only that was the issue for Real Madrid.

The EU is also looking into the club, Barcelona, Athletic Bilbao, and Osasuna over whether they are improperly categorizing themselves as foundations instead of as companies or LLCs—like their competing clubs in Spain—and allowing themselves to save on tax payments.

Oooh boy, that'll be fun.

Barcelona already lost its president two years ago after shady dealings involving the purchase of Neymar came to light. Who knows where this will lead.

But just in case you thought this was only about the big clubs in Spain, it's not. Here's AS:

"Other Liga clubs that have been the beneficiaries of state aid or irregular tax breaks will also have to pay back in full the amounts received. This applies to the collateral guarantees provided by the Valencia regional government against several loans provided by regional savings banks to Valencia (86 million euros), Hércules (18 million) and Elche (14 million)."